Why your clients need Tax Risk Insurance
Ensuring you have heavyweights in your corner when SARS comes knocking.
from *R210 p/m
from *R219 p/m
from *R179 p/m
*Terms and Conditions apply.
WHAT WE COVER
The cost of defending your case or justifying your position to SARS can
We cover the cost of defending:
WHAT WE DON'T COVER
Audits and disputes which have commenced prior to the inception of the policy
Audits from tax returns which were submitted late, without extensions being granted
Where proper records were not kept
Where fraud or crime is involved
Costs of tax return preparation
Matters outside RSA borders
Any taxes, interest, penalties or fines correctly imposed by SARS
When it comes to tax, your clients look to you for all the answers
Tax Risk Insurance, to you and your client, is the difference between a lose-lose and a win-win
We all know one thing for sure: regardless of SARS official position, your clients are entirely responsible for their own tax affairs. So, what happens when SARS selects one of your clients for a tax audit? You’ll most likely be your client’s first call as they pay you to ensure their peace of mind.
Last year, SARS audited 1.5 million registered taxpayers in South Africa. That is 14,47%. With SARS facing in excess of an R300 billion tax shortfall, they are under pressure to meet targets, which is leading to increased audits.
They are targeting SMMEs, business owners, High-Net-Worth Individuals and Trusts. More detailed tax audits and investigations are being performed to curb tax avoidance.
Some of the best professional advice you can offer each of your clients – particularly those who are the most at risk - is to cover themselves against the possibility of having to defend themselves, even in court, to reach a fair and satisfactory resolution of a SARS' audit.
How much does the cover cost?
Not much, considering the risk you’re facing! From only *R210 for individuals and *R219 for businesses monthly, you will get Tax Risk Insurance cover you need for total peace of mind. That’s less than an average business lunch for one!
Premiums are dependent on your annual taxable income for personal taxpayers, or annual turnover for companies.
*Terms and Conditions Apply
WHY CHOOSE TAX RISK INSURANCE
Only protection of its kind in South Africa in the event of SARS' tax audits and related disputes
Available for businesses, individuals and trusts
SARS is targeting SMMEs, trusts and High-Net-Worth Individuals (HNWIs)
Cost of a SARS' tax audit and related disputes can run into thousands of Rands
No matter how good your accountant/tax practitioner is, you may be selected for a tax audit
Sometimes you need to go to court - tax lawyers are expensive
Incorrect tax assessments can bankrupt you
Cost of a SARS' tax audit can force you to shut down your business
HOW WE HELP YOUR CLIENTS
We offer individuals, business owners and trusts immediate expert assistance from unfair or incorrect tax re-assessments that often come with being selected for a SARS' tax audit.
Easy to understand cover
Cover is retrospective - no waiting periods
Access to South Africa’s top tax specialists/ lawyers
Once policy is active - assistance no matter how far back SARS reassesses
Fair tax treatment and audit outcomes
Your accountant’s fees are covered for services during the claim
Can claim more than once a year
Experts to assist you when there is an unexpected SARS’ tax audit and related disputes
Fixed indemnity limits so you know what you have available
Review the tax dispute resolution flowchart for easy reference in understanding tax dispute procedures.View PDF
Our Claims Process
If you receive a notification within 30 days of a SARS’ tax audit or related dispute, DO NOT RESPOND to SARS.
Contact Tax Risk Underwriting Managers immediately.
We will assess the claim and notify you when your claim is approved.
Tax specialists will be appointed.
Your defence starts immediately.
Once we are notified of the SARS’ tax audit or related dispute, we take ownership of the tax audit to ensure the best possible outcome.
Mr Cassim’s owns a shoe retail shop in the commercial centre of Durban. He pays his taxes and submits his tax returns regularly and on time. He has a very good accounting firm taking care of his accounting and tax affairs.
Following the submission of his latest returns by his accountant via e-filing, SARS requested Mr Cassim’s accountant to submit some supporting documents to his tax returns. This is nothing unusual. SARS often calls for supporting documentation to verify the information contained in a filed tax return.
But then SARS called Mr Cassim directly for an appointment to further their investigation.
Mr Cassim is a Tax Risk Insurance policyholder and calls Tax Risk Underwriting Managers before the meeting for some advice. This was the correct thing to do, as this meeting would clearly have infringed on Mr Cassim’s rights as a taxpayer. He might have inadvertently incriminated himself, as Mr Cassim is not a tax expert.
Tax Risk Underwriting Managers notified SARS that our tax attorney service provider will be acting on behalf of Mr Cassim. We were able to successfully represent Mr Cassim in this matter, ensuring that SARS followed due process as required by the Tax Administrations Act and that Mr Cassim’s rights were equally protected.
Botha and Partners is an accounting firm in Mpumulanga. Johan Botha recommends that all his clients buy a Tax Risk Insurance policy either from The Hollard Insurance Company or through their financial advisor.
When we asked why they had the following story to tell:
One of his long-standing clients was randomly selected for audit by SARS. His client owns a medium-sized business, but times are tough and there is not a lot of spare cash in the business. Johan knows this all too well – he is her accountant, after all.
To resolve the audit with SARS required four days of Johan’s time, as the taxpayer’s accountant. But here’s the issue; Johan was not able to charge his client for his time spent defending the audit because he knew his client had cash flow issues.
So he made a decision, in the best interest of his client, to do the work for free, rather than to leave his client to her own devices.
The problem is that the accounts’ time is money. If accountants don’t charge for the work they do, they will soon not have a business.
With a Tax Risk Insurance policy, Johan was able to send his invoice to Tax Risk Underwriting Managers for payment and focus on conducting a proper tax audit defence, on behalf of his client.
Our client is a Trust, which holds the interests of a farm in the Western Cape.
Unbeknownst to the rest of the Trustees, one Trustee is audited by SARS and found wanting. SARS then proceeded to also conduct an audit on the Trust.
During the audit, SARS disallowed all the VAT inputs and underlying expenses in the farm for the past 10 years. The reason for this decision was not made clear.
This translated into an outstanding tax bill to SARS of just short of R10 million. Tax Risk Underwriting Managers stepped in to defend the case. After the cost of R150 000 in professional defence fees – SARS conceded and overturned their original decision.
The matter was settled on a PAYE short payment of R2 000, which occurred due to an administrative error on the part of the Trust. The Trust then paid this outstanding R2 000 to SARS, together with a small amount in penalties and interest.
Tax Risk Insurance rescues SMME from SARS nightmare
Mr Jones,* a sole trader, operating a medium-sized sales business from a smallholding in the northern parts of Johannesburg, believes that taking out Tax Risk Insurance for his company, saved his business from financial ruin.
SARS' tax audit versus verification - what is the difference?
A practical interpretation provided by Dr Daniel Erasmus to assist in understanding the difference.
Taxpayers- know your rights when interacting with SARS!
Important guidance for taxpayers around their fundamental rights when interacting with the South African Revenue Service (SARS)
SARS dips into taxpayers’ bank accounts
SARS is issuing garnishee orders against taxpayers’ bank accounts without issuing a summons, judgement or notification, regardless of whether the assessment is correct or not.
Pay now, argue later, principle
What actions you can take when SARS issues an assessment on you or your business, which is incorrect or baseless but insists on ‘pay now, argue later’.
Vague and ill-informed tax objections can result in very serious ramifications for the taxpayer, even where they may have been …
Taxpayers need to be alerted that a planned change in legislation could mean that common errors with tax returns may be harshly …